Foundries' revenue heats up in October

The world's two largest contract chip manufacturers, Taiwan Semiconductor Manufacturing Co. and United Microelectronics Corp., saw double-digit gains in revenue in October, a sign that may point to better times ahead.

Revenue for TSMC, the larger of the two Taiwanese companies, grew by 33 percent, and UMC's revenue rose by 27 percent, according to recent company statements.

Because the two foundries manufacture chips exclusively for other companies, their fortunes can serve as a leading indicator for the semiconductor industry in particular and for the electronics industry as a whole.

TSMC's October sales totaled about $595 million, up one-third from October 2002 and up 7 percent sequentially from September 2003. The October 2003 revenue was a record, the company said.

UMC's October sales totaled about $225 million.

The October revenue increases, which mirror an overall increase in chip sales recently reported by the Semiconductor Industry Association, point to a better overall climate to come, as more companies are ordering greater numbers of chips, which will be used in more finished goods.

Showing improvement in several areas, worldwide chip sales reached $14.4 billion in September, the SIA reported last week.

The industry group has not yet released its October figures. But its latest forecast projects that chip sales will grow 15.8 percent to $163 billion in 2003.